Silver Price Chart Hints XAG/USD May Have Topped. What Next?
One of the common questions I am asked is what to do if silver price chart hints are showing a double top or what are they about. This is a valid question that you need to have the answer to for yourself before you take any final decisions.
Two significant price action takes place when a bull market is at its peak. The first is that the price climbs dramatically, like two separate highs then dives back again after the high. This is known as a break and it can cause significant selling pressure.
We usually see double tops in the silver price chart as a result of this type of action. There are times when the price rises so high that it is hard to see a bottom and therefore the market does not stop climbing in either direction, but instead keeps climbing.
When this type of market is taking place, the market is still climbing upward on one side and begins to plunge on the other. You can see this when two different pairs have been forming their tops in the same chart. A very extreme example of this is the rise and fall of gold and silver in the latter half of 2020.
In this case, the second top that was formed with silver formed as a result of a break from the first high that had formed. The price continued to climb until it became clear to the market that this would be a repeat of the first double top.
The second kind of double tops has also been shown to occur in the silver market. However, unlike the first double top, which occurs as a result of two separate action patterns, double tops form in a relatively subtle way.
Instead of a breakout going up and down in just two charts, you may see one pair moving up twice. The first time it climbs higher as a result of two separate movements of the price.
The market may have been involved in some type of negative price action like a dip or rally for a short period of time and that is how it ends up being two separate prices. This is a reason why you should pay attention to silver price chart hints for double tops because the market is taking a breather after a major move.
You need to know that during a bull market, investors are increasingly looking to hold onto their precious metal for as long as possible. You can see that this has been true over the last several years and even over the last couple of months.
This is why we are seeing a pullback in the number of investors that are trying to get in on silver now. You can continue to buy silver because the price will not keep moving higher indefinitely.
The price action that happened in the second half of the year will make investors afraid to sell their precious metal. Even though the market is moving steadily up again, you will still want to hold onto the metal until it reaches the all-time highs.
If you are concerned about double tops, you should know that double tops in the silver price chart happen when the price is increasing and the price action on the second chart shows that the price has come down. Be sure to pay attention to the silver price chart hints and double tops in the next couple of months.